Syndication of a DM 425 million ($250 million) commercial credit for the Birecik dam project has been put on hold by the arranger, Chase Manhattan Bank.

A mandate for the build-operate-transfer (BOT) deal was given by the treasury to Chase in March, but external commercial project lenders have since tightened up on fresh Turkish risk (see Cover Story).

The treasury is reviewing Turkey's major projects, which include a series of contracts valued at a total of about $985 million for large thermal power stations. Bankers say the Birecik dam may be spared because, in theory, as a BOT project it places no direct drain on the exchequer.

Chase is the financial adviser to a BOT consortium led by Germany's Philipp Holzmann (MEED 18:6:93, Cover Story). The project's financing structure comprises about DM 1,700 million ($1,000 million) in debt, and the remaining portion in equity, for a total cost of about $1,250 million. Chase plans to assemble a package of four export credits and one commercial tranche. Export credits would be provided by European official export credit agencies, namely Germany's Hermes, France's Coface, Belgium's OND and Austria's OKB. The 672-MW dam is to be built on the Euphrates in the southeast.